Participate in Arbitration/Mediation to Resolve a Pending Legal Dispute With a Former Employee

Key Points

  • Alternative dispute resolution, including mediation and arbitration, is an efficient, cost-effective method to resolve pending disputes with employees. The process is much less formal than litigation and may involve a non-binding suggestion for settlement, provided by a qualified mediator or arbitrator, which may encourage both sides to compromise and resolve their differences before engaging in full-fledged litigation.
  • Employers with non-unionized employees can take steps to minimize their exposure to litigation stemming from employment disputes by including mediation clauses in their on-boarding paperwork and/or employee handbooks and policy manuals. Employers should take steps to familiarize themselves with applicable state law to ensure the mediation clauses are enforceable.
  • Whereas mediation is an informal process typically reserved for non-unionized employees, arbitration is more formal as to evidentiary standards and procedures and may be binding in the sense that the arbitrator's decision is final. Employers with unionized employees may choose to build arbitration agreements into their collective bargaining agreements to prevent litigation resulting from workplace disputes altogether, but the effectiveness of such agreements will turn on whether the arbitration agreement is legally enforceable.
  • The HR professional has an important role during the course of mediation or arbitration. He or she is the gatekeeper between the employer and the attorney representing the employer and thus, controls the flow of information. The HR professional can be extremely helpful in representing the employer's interests during mediation or arbitration, by gathering information and conveying the employer's message to the parties.

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